fah hospital policy blog

Perspectives on health policy affecting America’s hospitals and the patients we serve.

Category Archives: sequester

Hospital Community Opposes Proposed Sequestration Cut

April 22, 2015 | FAH Hospital Policy Blog Team

Category: Medicare, Sequester

In letters to both the U.S. Senate and the U.S. House of Representatives, the FAH and other leading hospital and health system organizations opposed legislative language proposed this week during trade bill negotiations that would extend Medicare sequestration.

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The Fiscal Health of Hospitals: The Impact of More Than $400 Billion in Cuts

November 06, 2014 | FAH Hospital Policy Blog

Category: Legislation, Medicare, Sequester

The 2014 mid-term elections are now behind us, and the nation looks ahead to a busy legislative calendar in lame duck and into 2015. At this time, it is important to take stock of the fiscal landscape for hospitals and the communities we serve across the country. Understanding the operational reality hospitals face is critically important; policymakers cannot overlook the continuing burden of significant cuts that hospitals face in the short and long-term.

As the graphic below illustrates, hospitals are bearing the entirety of $121.9 billion in cuts enacted since 2010. And these numbers do not include the more than $320 billion in hospital Medicare and Medicaid cuts related to the Affordable Care Act. All told, hospitals face a staggering $400+ billion in cuts over the next ten years.

These cuts are a financial pile-on, with Congress and the Administration leaning continually on Medicare to help offset costs in other sectors of the economy, or to forestall a pressing economic crisis. And with Medicare viewed as a fail-safe bailout piggybank, hospitals are being pushed to our limits.

As a result, hospitals face -8% Medicare margins in 2014 – an all-time low since Medicare’s inception in 1965. These cuts impact not only hospitals, but also threaten American seniors’ access to the critical hospital care they need.

Hospitals strive to protect patient access to care. Providing 24/7 care to patients in every community is the top priority for hospitals, and mounting cuts threaten our ability to do our jobs properly. We have said it once, but it bears repeating: hospital cuts are not just numbers on a budget sheet. The people behind these numbers are our patients, and when it comes to considering any future budget cuts, enough is enough.

Policymakers must remember that hospitals are working dutifully to provide quality care to every patient while making important investments (such as critical care, health IT, and staffing) to adapt to a transforming national model of integrated care. Financial cuts threaten all of this, and it is our patients and communities we serve who suffer as a result.

As the current legislative year winds to a close and Congress begins preparations for 2015, we urge Members of Congress and the Administration to remember that this national fiscal picture for hospitals extends to every hospital, in every state, in every community. The time has come to stop looking at Medicare payments to hospitals as a piggybank.

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Debt Ceiling Politics: Medicare as a Piggybank Once Again

February 10, 2014 | FAH Hospital Policy Blog

Category: Medicare, Sequester

Later this week, the House is poised to consider debt ceiling legislation that would once again cut Medicare payments to hospitals that care for seniors. The message from Congress to America’s seniors and the hospitals that care for them seems crystal clear—Medicare can be treated as a budgetary piggybank.

The FAH is deeply dismayed to see the Medicare sequester extension once again offered as a means to pay for other legislative priorities. Just a few weeks ago, the Senate rejected a similar effort to fund the unemployment extension bill.

Congress must recognize that the cumulative cuts to hospitals are unquestionably impacting access to care for seniors and local health care jobs. In fact, with the recent December budget deal and the physician payment patch, Congress has imposed billions more in Medicare cuts to hospitals over ten years, which now totals well over $400 billion. In the last three years alone, $113 billion in ten year cuts have been imposed. Hospitals strive to be as efficient as possible and to do more with less, but these cuts are now contributing to the lowest negative hospital Medicare margins in history. It is impossible for these cumulative cuts to not impact patient access.

Extending the Medicare sequester to 2024 is bad public policy, and would take billions more dollars from financially stressed local community hospitals striving to provide care to seniors.

It is for this reason that the entire hospital community has joined together in sending a letter to Congress opposing the Medicare sequester extension and calling for members to reject this proposal. We urge Congress to stand up for your local hospitals, the communities they serve, and the seniors that depend on them.

The FAH will continue to fight for our patients. Protecting their access to care is our priority and we will not allow hospitals and Medicare to serve as the piggybank for every passing political crisis.

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Putting a Stop to the Medicare Piggybank Protocol

January 13, 2014 | FAH Hospital Policy Blog

Category: Medicare, Sequester

As the Senate prepares to vote on the Reed amendment, which would extend Medicare sequester cuts to 2024 to pay for the extension of unemployment benefits, several in the health policy arena are speaking out with words of caution about using Medicare as a budgetary panacea. In a new post on Healthcare Lighthouse, Billy Wynne outlines the concerns many of us share about perpetual extensions of the sequester to cure immediate budget needs. Wynne explains:

“…in the Bipartisan Budget Act of 2013 (the Ryan-Murray deal), to the surprise of virtually everyone, the Medicare sequester was extended by two years, bifurcating it both chronologically and politically from the rest of the sequester. This also, as some stakeholders warned at the time, appeared to establish the Medicare component of the sequester (only) as a perennial source for cash when Congress has others priorities to pay for.

Turns out these critics were right, because now Congress has seriously considered extending these Medicare cuts again to pay for a completely unrelated item. At the Lighthouse, we always strive to deliver unbiased facts, without sauce or spin. But the formalization of Medicare as a permanent piggy bank, sitting on Congress’ shelf with a loose hatch on its underbelly, should probably get a little more public scrutiny, to say the least.”

To be clear, the FAH supports the extension of unemployment benefits for millions of Americans. We in no way want to prevent those resources from getting to individuals and families in need. The issue at hand is Congress creating a new, dangerous legislative crutch by using Medicare as a piggybank, putting millions of American seniors at risk in the process. With cuts approaching well over $400 billion over the next ten years, the nation cannot afford for Congress to keep draining tens of billions more from Medicare. Hospitals will close, access to care will be impacted, and seniors will not have vital services they need.

The FAH once again implores members of Congress to oppose the Reed amendment and the damaging consequences it poses for millions of American seniors.

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